Replacing the current gas heater with a smaller heater

One of my relatives' water heater is leaking from the bottom. It appears that the bottom is corroded and probably needs to be replaced with a new one. They currently have a Richmond 7K50 50 gallon gas, 40,000 BTU. First hour is 74 gallon.

They used to have several kids around the house, but they have all grown and left the house. The question is can they save some money and install a smaller unit. There is a GE Model GG40T06AVG01 at Home Depot that has a 40 gallon tank, 36,000 BTU, but the first hour is only 67 gallon. Do you think this is enough for 2 people and may be 3 (when someone visits). Will there be a problem with hooking up compatibility?

The dad will apparently hook up the heater. He has apparently done the last two.

I was told some places determine the size of the WH based on the number of available bathrooms and fixtures; not how many are actually living there. So what's practical for you now might not meet code or the next occupants.

Another issue is the spec is based on the incoming water being a certain temp...if yours is colder, it won't produce as much hot water. One way to extend the capacity of the WH is to run it hotter, then mix the output with cold as required to keep it safe for people. This is done with a tempering valve at the output of the WH. This gives the effect of having a larger WH. It also can be safer since it is generally considered that 140-degree water is required to kill various nasty things that MIGHT be in the tank. Normally, this is only a problem when it sits, but 120-degree water (a common setting) is nearly ideal incubator temp for nasties.

If they have a hydronic (forced hot water) heating system with a reasonably new (less than 15 years old) boiler they should forget about a standalone HW tank and spring for an indirect-fired tank running off the boiler. It'll outlast the boiler, run at comparable or better efficiency as the standalone during the summer, and at signficantly higher efficiency during the heating season (improving the as-used AFUE efficiency of the boiler at the same time.)

There is federal tax credit subisdy for this, and in many areas other incentives may apply as well.

It's really the right way to go- more efficient, one burner to meet the two largest thermal loads, one appliance to maintain, etc, etc.